U.S. Jobs Insourced Down Home
It seemed too good to be true — 300 high tech jobs looking for a small town. Because the city took good care of itself, Brewton turned out ideal after this Atlanta IT’s search for a rural homeplace.
New Provalus employees celebrate the company’s arrival in Brewton.
Maybe it was the economic incentive package that convinced Provalus to locate an IT center in Brewton in rural Escambia County. But the flowers downtown and the mayor’s wife’s fudge pie didn’t hurt.
In less than a year, Brewton, population 5,400, has turned into a success story for rural economic development in Alabama. It is now home to what Provalus calls “onshoring,” developing technical service centers in underserved parts of the Southeast instead of outsourcing that work overseas. Even before ground was broken in late October for its $6.5 million operations and training center, Provalus was already running training classes, landing its first client and employing 17 people in temporary digs downtown.
“I think it was a perfect marriage,” says state Commerce Secretary Greg Canfield. “You had a company in Optomi that was creating Provalus, with the whole business strategy of coming to rural communities and setting up an opportunity to have an IT operation to support IT to their customer base, in this case in rural Alabama.
“We happen to have a marketing strategy developed to recruit those types of companies and to provide them the right type of inducement to be able to make the business case so that Alabama was the low-cost provider.”
Provalus, standing for “Providing Value from the US,” is a division of Optomi, a technology services company based in Atlanta. When the 65,000-square-foot facility is
completed in 2019, about 50 percent of its services will be in information technology outsourcing, such as application development, computer programming and quality assurance, says company President Chuck Ruggiero.
Another 30 percent will be business process outsourcing, and the remaining 20 percent will be help desk and call center services. The initial client in Brewton is American Advisors Group, a reverse mortgage lender based in Southern California.
“Our business model is outsourcing,” Ruggiero says. “Outsourcing is a growing world. It makes up about $162 billion of revenue in the United States alone. So we’re looking for a small portion of that.
“Instead of having to send your work overseas, you’d send it to Brewton, Alabama. Obviously, with cost structures overseas they can do it cheaper, but we can do it better.”
The need to get started immediately in a temporary building was another reason Brewton proved attractive. The first contact was made in January, and the formal announcement of the project was made in August.
Provalus sought a small town in the Southeast with progressive leadership. “We don’t fit into every rural town,” Ruggiero says. “With the mayor being very aggressive, with the state being very aggressive, it was actually a perfect location.”
A rural area, well away from major cities, offered what Ruggierio called “a concentrated work force.” Among the locations Brewton beat out was one in South Carolina, where, he says, the state was not as aggressive in its recruiting.
Initially, however, economic development officials were skeptical, says Will Ruzic, executive director of the Coastal Gateway Regional Economic Development Alliance. The EDA covers Choctaw, Clarke, Conecuh, Escambia and Monroe counties.
“To be honest with you, when a company says ‘Hey, I would like to bring 300 software development and coding jobs to your region, your small town,’ our first thought was, ‘You know what? We’re extremely busy to be wasting our time on pie in the sky.’ We just had a hard time believing that a company of that nature would be looking at coming into a rural area.”
But the more they talked, the more excited the locals became. “This is how you change a community,” Ruzic says.
Ruzic says the company used its own software to locate cities in the Southeast that might fit its parameters. From an initial list of 200 communities, Provalus started doing research online, narrowing the search to 10 cities, including Brewton. That’s when the regional EDA got the first phone call, and Ruzic says other economic development officials should take heed. As it turns out, Provalus demonstrated the value of the $15,000 overhaul of the EDA’s website two years earlier.
“The lesson there is always be aware of your internet presence, because a lot of times you’re being eliminated and you don’t even know you’re in the game. We make sure we tell people that story, because they did their research based on public information.”
Another advantage in Brewton was Mayor Yank Lovelace and the City Council’s commitment to reinvesting the city’s revenue, Ruzic says. The first impression made on Provalus was important.
“When they came into Brewton, what they saw were parks that were very well maintained, new parks that were being built,” Ruzic says. “They saw flowers hanging downtown, and they commented on those twice. They saw streets that were being paved. New sidewalks were being put in all over the community.”
At the groundbreaking, Ruggiero especially made reference to a chocolate fudge pie baked by Lovelace’s wife, Sally, and served at a dinner the couple hosted for Provalus representatives. The evening was a hit, and Mrs. Lovelace sent another pie home with Ruggiero. Now, he says, when he comes home from Brewton, everyone says, “Did you bring pie?”
The mayor cites additional assets besides his wife’s baking skills.
“We had two fiber optic lines here,” Lovelance says. “We had, in their minds, a perfect temporary site for them, and we had the perfect final site to build their buildings. We had the workforce. We had the community college here. And then the state of Alabama incentive programs hit just right for them. So it was a lot of moving parts that all sort of came together.”
The mayor says Brewton traditionally has relied on resource-based industries such as timber. “We’re real excited,” he says. “It’s a home run for a small town.”
Lovelace estimates the total incentive package at $7.5 million, but says the exact amount won’t be known until construction bids come in. The city is providing the land, constructing an access road and other infrastructure, and constructing the buildings. State incentives include a $1.5 million cash grant to the city of Brewton, a “jobs credit” valued at $2,568,245 over 10 years, and AIDT workforce-training assistance valued at $1,845,000.
The land, a former golf course, will be turned into a mixed-use development but will primarily be a technology office park, Ruzic says. The city will lease the buildings to Provalus over 15 years. At the end of that time, the city will have recouped its investment and Provalus will own its buildings. Clawbacks are included in all the arrangements, Ruzic says.
“I’m just thrilled about this project today,” Gov. Kay Ivey said at the groundbreaking ceremony. “When businesses like Optomi invest in building new buildings and hiring new workers, it’s a sign that we’re doing things right, creating a positive business climate throughout our state.”
Jane Nicholes and Matthew Coughlin are freelancers for Business Alabama. Nicholes is based in Mobile and Coughlin in Pensacola.